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BJ 8e Ch19 Completing The Audit Post Audit Responsibilities

This chapter discusses completing the audit process and post-audit responsibilities. It covers subsequent event reviews, obtaining legal letters, client representations, analytical procedures, evaluating findings including misstatements and going concern considerations, drafting audit reports, and communicating with the client about internal controls, the audit conduct, and management letters. The chapter provides guidance on finalizing the audit in compliance with auditing standards.

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18 views17 pages

BJ 8e Ch19 Completing The Audit Post Audit Responsibilities

This chapter discusses completing the audit process and post-audit responsibilities. It covers subsequent event reviews, obtaining legal letters, client representations, analytical procedures, evaluating findings including misstatements and going concern considerations, drafting audit reports, and communicating with the client about internal controls, the audit conduct, and management letters. The chapter provides guidance on finalizing the audit in compliance with auditing standards.

Uploaded by

Nahnuriyah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Modern Auditing:

Assurance Services and the Integrity


of Financial Reporting, 8th Edition

William C. Boynton
California Polytechnic State
University at San Luis Obispo
Raymond N. Johnson
Portland State University

Chapter 19 – Completing the Audit and Postaudit


Responsibilities
Chapter Overview
Completing the Audit
• Do not pertain to specific transaction
cycles or accounts

• Performed after the balance sheet date

• Involve many subjective judgments

• Usually performed by audit managers or


other senior members of the audit team
Completing the Fieldwork
• Making Subsequent Events Review
– Types of Events
• Type 1 subsequent events

• Type 2 subsequent events

– Auditing Procedures in the Subsequent


Period

– Effects on Auditor’s Report


Subsequent Events
Completing the Fieldwork
• Reading Minutes of Meetings

• Obtaining Evidence Concerning


Litigation, Claims, and Assessments
– Audit Considerations

– Letter of Audit Inquiry

– Effects of Responses on Auditor’s Report


Completing the Fieldwork
• Obtaining Client Representation
Letter
– Content of Representation Letter

– Effects on the Auditor’s Report

• Performing Analytical Procedures


– Overall Review
Evaluating the Findings
• Making Final Assessment of Materiality
and Audit Risk
– Known Misstatements

– Projected Uncorrected Misstatements


(Sampling Techniques)

– Estimated Uncorrected Misstatements


(Analytical Procedures)

– Likely Misstatement

– Aggregate Likely Misstatement


Evaluating the Findings
• Evaluating Going Concern
– Substantial Doubt Exists
• Obtain information of management’s plans
• Assess likelihood of effective
implementation

– Substantial Doubts Persists


• Consider adequacy of disclosure
• Include explanatory paragraph
Evaluating the Findings
• Making Technical Review of
Financial Statements
– Financial Statement Checklist

• Formulating Opinion and Drafting


Audit Report on Financial
Statements
Evaluating the Findings
• Formulating Opinion and Drafting Audit
Report on Internal Controls Over
Financial Reporting
– Opinion about fairness of management’s
assertion on internal controls
– Opinion about adequacy of internal controls

• Making Final Reviews of Working Papers


– First-level
– Manager
– Partner
– Cold Review
Communicating with the Client

• Communicating Internal Control


Matters
– Significant Deficiency

– Material Weakness
Communicating with the Client

• Communicating Matters Pertaining to


Conduct of Audit
– Auditor’s responsibility under GAAS

– Significant accounting policies

– Auditor’s judgment about the quality of the


entity’s accounting principles

– Management judgments and accounting


estimates
Communicating with the Client
• Communicating Matters Pertaining to
Conduct of Audit
– Significant audit adjustments

– Disagreements with management

– Consultation with other accountants

– Major issues discusses with management


prior to retention

– Difficulties encountered in performing the


audit
Communicating with the Client

• Preparing Management Letter


– Internal Control Matters

– Recommendations regarding the


management of resources

– Tax-related Matters
Summary of Completing the
Audit
Postaudit Responsibilities
• Subsequent Events Between Report
Date and Issuance of Report

• Discovery of Facts Existing at


Report Date

• Discovery of Omitted Procedures

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